Report: PSA’s smaller shareholders criticize the capital increase

According to a report from French newspaper Les Echos a part of PSA’s minority shareholders, united in a group called Adam, have taken action to speak against the capital increase, writing to PSA Peugeot Citroen to criticize the terms.

As we all know, the troubled carmaker, which still holds the title of being Europe’s second biggest after Volkswagen AG, has initiated a long debated and reported capital hike that will have China’s Dongfeng and the French state acquire big stakes in the carmaker –a round 14% each, in order for the company to raise around 3 billion euro ($4.1 billion).

Now, minority shareholders’ group Adam sent the letter to Peugeot’s chairman in which they question the terms of the deal.

“The sizeable portion taken up by the state may ward off other potential investors and make it more difficult to seal alliances with other carmakers,” Les Echos quoted the letter as saying.

The group implies that neither Dongfeng nor the French state should enter the capital hike if banks are willing to subscribe to the rights issue. They suggest there is also another possibility – the Chinese, the French state and the Peugeot family should offer a combined takeover proposal for the company.